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Vodafone, EE and Three found to continue charging customers for the mobile phones they buy as part of a contract, even after the cost of the handset has been paid off.
Citizens Advice warned that this means some customers are paying on average an extra £22 a month for a phone they have already paid off, although some phones, such as the iPhone 7 128/256GB, the Galaxy S8 and the Xperia XZ Premium, could be as high as £38 a month.
The research found that those aged over-65 are most likely to be stung, with 23 per cent of this age range with a handset-inclusive mobile phone contract staying in their contract for over 12 months past the end of the fixed deal period, compared to 13 per cent of people aged under 65.
The charity is calling for mobile phone companies to separate out the cost of a handset from the cost of mobile phone services.
Gillian Guy, chief executive of Citizens Advice, said: “Some of the largest mobile phone providers are routinely overcharging their loyal customers. Mobile phones are now an essential part of modern life, but the way that the cost of handsets are hidden within some mobile phone contracts gives phone providers a way to exploit their customers. It is clearly unfair that some phone providers are charging loyal customers for handsets that they have already paid for. It’s especially concerning that older customers are more likely to be stung by this sharp practice.
“Phone providers must now make sure that any customers staying in a contract past the end of a fixed deal have their monthly bill reduced to reflect the cost of the handset. Providers could make it much easier for consumers to compare prices by separating out the cost of handsets from the cost of services like data and minutes for all contracts, that way it would be much clearer what they’re paying for. It’s important that Ofcom and the government are prepared to protect consumers by making providers take these steps, if they do not do so themselves.”